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New personal loans reach ten-year peak in Hungary

Banks disbursed new personal loans worth HUF 111 billion in Hungary in the first five months of this year, up 48% from the same period in 2016 and the highest January-May figure since 2007, BankRacio.hu told MTI today.

Péter Gergely of BankRacio.hu said interest rates on personal loans are now far lower due to the more attractive interest environment than they were five years ago. Some of the personal loans on offer at the moment have a one-digit annual percentage rate (APR), which was inconceivable a few years earlier, he added. The market for personal loans is also boosted by higher real wages and the more stable financial position of households, he said. 

BankRacio.hu said it expects the dynamic increase to continue, adding that borrowers are likely to take a better look around before choosing a lender, which could boost competition among the banks.